A duplication of benefit (DOB) is the receipt of funding from multiple sources (FEMA IA, FEMA NFIP, SBA Loans, Private Insurance, and Other Funding) for the same purpose.
When you hire a lawyer to litigate on your behalf for more insurance funds within your policy limits your attorney fees are not counted as a duplication of benefits and are actually used to reduce the total insurance awarded based on the simple fact you had to pay using insurance funds to receive additional insurance funds.
This only applies to successful litigation. If you loose and paid your attorney then you didn't hire your attorney on any logical contingency agreement. Be sure your attorney will not charge you if unsuccessful with their litigation attempt.
Legal Fees DOB Reduction
Legal fees for insurance coverage litigation that were paid out of insurance proceeds in successfully obtaining additional insurance proceeds will be credited to the applicant and will not be deducted as part of their DOB. In order to be credited for legal fees, an applicant will need to submit the following:
- Copy of the fee agreement for the payment to the attorney that pre-dates the settlement.
- The fee agreement should state the percentage that the attorney is allowed to charge and that the client is responsible for the reimbursement of costs.
- Evidence of payment made to the attorney.
- Self-certification that the applicant authorized the use of his/her insurance proceeds for legal fees.
- If there is an expert report included in the attorney invoice in connection with the lawsuit/settlement and if the amount of that report exceeds $1,000, then the applicant will need to collect both the invoice from the expert to the attorney and a copy of the expert report.
- Once all documentation has been received your DOB will be credited.
If an applicant is an attorney, then neither he/she nor his/her firm can represent against his/her own insurance carrier as the basis for a reduction of DOB.